Connecticut Court Declines to Apply Physician Non-Compete Statute Retroactively

A Connecticut superior court recently held that Connecticut’s statute limiting the noncompetition agreements by which Connecticut physicians may be bound, may not be applied retroactively.

In the 2016 legislative session, the Connecticut legislature enacted Section 20-14p, which provides, among other things, that a non-competition agreement with a physician may not restrict the physician’s activities for more than one year or apply to a geographic region larger than 15 miles from the primary site where a physician practices. Section 20-14p applies to any covenant not to compete that is “entered into, amended, extended or renewed on or after July 1, 2016.” §20-14p(b)(2).

In Jefferson Radiology, P.C. v. Baldwin (CV16-6070917), the Hartford Superior Court was faced with a motion for a temporary injunction by a radiology practice against its former physician employee. Dr. Baldwin’s employment agreement with Jefferson Radiology, dated September 18, 2012, included a provision stating: “If Employee’s employment [with] the Corporation is terminated for any reason, Employee shall not Compete with the Corporation in the Restricted Area… for a period of twenty-four (24) months following Employee’s termination date….”

Dr. Baldwin asked the court to apply §20-14p retroactively to his Employment Agreement. He argued that if the court did not do so “the consequence would violate the public policy implicated in the statute, which is to limit any non-compete provision applicable to [a] physician to no more than a twelve-month term.”

The court rejected Dr. Baldwin’s argument. It pointed out that not only did the statute itself state that it applied to contracts “entered into, amended, extended or renewed on or after July 1, 2016,” but that legislative history also supported the intention of the legislature not to make the statute retroactive.

This decision is the first time a court has ruled on this statute. The court deferred to the plain meaning of the statute and its legislative intent to reject a “public policy” argument that would have broadened the statute’s coverage beyond its terms.

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